U.S. President Joe Biden attends CNN City Hall at the Pabst Theater in Milwaukee, Wisconsin on February 16, 2021.
SAUL LOEB | AFP | Getty Images
“We need the forgiveness of the student loan in addition to the $ 10,000 potential that his administration proposed,” Jocelyn Fish, director of marketing for a community theater, told President Joe Biden at CNN’s presidential prefecture on Tuesday night. “We need at least $ 50,000 minimum. What are you going to do to make that happen?”
“I’m not going to make that happen,” replied the president.
Biden went on to suggest that it made no sense to use money to forgive student debt “for people who studied at Harvard, Yale and Penn”.
The exchange quickly shook progressives, defenders and student borrowers who asked Biden to increase the amount of debt forgiveness he supports from $ 10,000 to $ 50,000 and cancel loans through executive action.
Proponents also point out that it is largely a myth that people with student debt – especially those struggling with it – have the benefit of a prestigious education behind them.
“The vast majority of students who graduate from the elite schools that the president mentioned at CNN City Hall graduate with zero debt for student loans,” said Eileen Connor, director of litigation for the Predatory Student Loan Project at the Law School of Harvard.
In fact, only 0.3% of federal debtor students attended Ivy League colleges, according to estimates provided to CNBC by higher education specialist Mark Kantrowitz.
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“Ivy League colleges are just eight out of more than 6,000,” said Kantrowitz. “Ivy League colleges also have ‘no loan’ financial aid policies that significantly reduce the percentage of students who borrow.”
The president’s statements suggested that he has yet to come up with a broader student loan forgiveness plan like the ones his progressive rivals advocated in Democratic primaries. (Biden said he favors $ 10,000 in forgiveness and more for those who have attended public colleges and historically black colleges and universities.)
His comments also echoed the arguments of Republicans and some moderate Democrats that student debt forgiveness is a handout for Americans with extravagant college degrees.
“If you accumulated $ 100,000 to study poetry at Bowdoin and end up selling coffee at Starbucks, you may regret some of your choices and I sympathize with you, but I’m not sure why you deserve a $ 50,000 taxpayer check,” said Rick Hess, director of educational policy studies at the American Enterprise Institute.
However, only 12% of student borrowers attended very selective colleges and universities, Kantrowitz found. About a quarter of borrowers are from private nonprofit colleges.
But by far, the largest share of borrowers – 49% – came from public colleges.
“Public colleges are not cheap,” said Kantrowitz, adding that it still costs more than $ 22,000 a year to attend one, including tuition, accommodation, meals and fees.
Meanwhile, another quarter of borrowers have attended for-profit schools, which have been criticized for misleading students about career programs and results, as well as preying on veterans and people of color. Almost half of those who take out student loans at these schools end up in default.
“Wealthy students who attend ‘elite’ schools are not usually in trouble,” said Ashley Harrington, federal director of defense for the Center for Responsible Lending.
“We have to see what is really going on with this crisis and who is really being affected,” said Harrington. “Student loan debt disproportionately affects low-income and low-wealth people [and] Blacks and browns are the ones who struggle the most. “